Question 1

If a price ceiling is a binding constraint on a market,then

Accepted Answer

A) the equilibrium price must be below the price ceiling. 
B) the quantity supplied must exceed the quantity demanded. 
C) sellers cannot sell all they want to sell at the price ceiling. 
D) buyers cannot buy all they want to buy at the price ceiling. 
A) the equilibrium price must be below the price ceiling. 
B) the quantity supplied must exceed the quantity demanded. 
C) sellers cannot sell all they want to sell at the price ceiling. 
D) buyers cannot buy all they want to buy at the price ceiling.

Question 2

When a binding price floor is imposed on a market,

Accepted Answer

A) price no longer serves as a rationing device. 
B) the quantity demanded at the price floor exceeds the quantity that would have been demanded without the price floor. 
C) all sellers benefit. 
D) All of the above are correct. 
A) price no longer serves as a rationing device. 
B) the quantity demanded at the price floor exceeds the quantity that would have been demanded without the price floor. 
C) all sellers benefit. 
D) All of the above are correct.

Question 3

A price ceiling is

Accepted Answer

A) often imposed on markets in which "cutthroat competition" would prevail without a price ceiling. 
B) a legal maximum on the price at which a good can be sold. 
C) often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling. 
D) All of the above are correct. 
A) often imposed on markets in which "cutthroat competition" would prevail without a price ceiling. 
B) a legal maximum on the price at which a good can be sold. 
C) often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling. 
D) All of the above are correct.

Question 4

If a binding price floor is imposed on the video game market,then

Accepted Answer

A) the quantity of video games demanded will decrease. 
B) the quantity of video games supplied will increase. 
C) a surplus of video games will develop. 
D) All of the above are correct. 
A) the quantity of video games demanded will decrease. 
B) the quantity of video games supplied will increase. 
C) a surplus of video games will develop. 
D) All of the above are correct.

Question 5

Economists generally believe that rent control is

Accepted Answer

A) an efficient and fair way to help the poor. 
B) inefficient but the best available means of solving a serious social problem. 
C) a highly inefficient way to help the poor raise their standard of living. 
D) an efficient way to allocate housing,but not a good way to help the poor. 
A) an efficient and fair way to help the poor. 
B) inefficient but the best available means of solving a serious social problem. 
C) a highly inefficient way to help the poor raise their standard of living. 
D) an efficient way to allocate housing,but not a good way to help the poor.

Question 6

​Figure 6-32  
-Refer to Figure 6-32.Which of following statements is true based upon the conditions in the market?

Accepted Answer

A) ​a shortage will develop when a price ceiling is imposed at a price of $10. 
B) ​a surplus will develop when a price floor is imposed at a price of $8. 
C) ​a surplus will develop when a price floor is imposed at a price of $12. 
D) ​a shortage will develop when a price ceiling is imposed at a price of $14. 
A) ​a shortage will develop when a price ceiling is imposed at a price of $10. 
B) ​a surplus will develop when a price floor is imposed at a price of $8. 
C) ​a surplus will develop when a price floor is imposed at a price of $12. 
D) ​a shortage will develop when a price ceiling is imposed at a price of $14.

Question 7

Consider the market for gasoline.Buyers

Accepted Answer

A) and sellers would lobby for a price ceiling. 
B) and sellers would lobby for a price floor. 
C) would lobby for a price ceiling,whereas sellers would lobby for a price floor. 
D) would lobby for a price floor,whereas sellers would lobby for a price ceiling. 
A) and sellers would lobby for a price ceiling. 
B) and sellers would lobby for a price floor. 
C) would lobby for a price ceiling,whereas sellers would lobby for a price floor. 
D) would lobby for a price floor,whereas sellers would lobby for a price ceiling.

Question 8

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Accepted Answer

A) Policymakers have studied the effects of the price floor carefully,and they recognize that the price floor is advantageous for society as a whole. 
B) Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into imposing the price floor. 
C) Buyers of corn,recognizing that the price floor is good for them,have pressured policymakers into imposing the price floor. 
D) Sellers of corn,recognizing that the price floor is good for them,have pressured policymakers into imposing the price floor. 
A) Policymakers have studied the effects of the price floor carefully,and they recognize that the price floor is advantageous for society as a whole. 
B) Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into imposing the price floor. 
C) Buyers of corn,recognizing that the price floor is good for them,have pressured policymakers into imposing the price floor. 
D) Sellers of corn,recognizing that the price floor is good for them,have pressured policymakers into imposing the price floor.

Question 9

Figure 6-3
 
-Refer to Figure 6-3.A nonbinding price floor is shown in

Accepted Answer

A) both panel (a)and panel (b). 
B) panel (a)only. 
C) panel (b)only. 
D) neither panel (a)nor panel (b). 
A) both panel (a)and panel (b). 
B) panel (a)only. 
C) panel (b)only. 
D) neither panel (a)nor panel (b).

Question 10

Figure 6-6  
-Refer to Figure 6-6.If the government imposes a price floor of $10 on this market,then there will be

Accepted Answer

A) no surplus. 
B) a surplus of 20 units. 
C) a surplus of 30 units. 
D) a surplus of 10 units. 
A) no surplus. 
B) a surplus of 20 units. 
C) a surplus of 30 units. 
D) a surplus of 10 units.

Question 11

Figure 6-13
This figure shows the market demand and market supply curves for good X.  
-Refer to Figure 6-13.Which of the following price floors would be binding in this market?

Accepted Answer

A) $3 
B) $4 
C) $5 
D) $6 
A) $3 
B) $4 
C) $5 
D) $6

Question 12

Figure 6-9  
-Refer to Figure 6-9.A price ceiling set at

Accepted Answer

A) $4 will be binding and will result in a shortage of 8 units. 
B) $4 will be binding and will result in a shortage of 16 units. 
C) $7 will be binding and will result in a surplus of 4 units. 
D) $7 will be binding and will result in a surplus of 8 units. 
A) $4 will be binding and will result in a shortage of 8 units. 
B) $4 will be binding and will result in a shortage of 16 units. 
C) $7 will be binding and will result in a surplus of 4 units. 
D) $7 will be binding and will result in a surplus of 8 units.

Question 13

Which of the following is correct?

Accepted Answer

A) Workers determine the supply of labor,and firms determine the demand for labor. 
B) Workers determine the demand for labor,and firms determine the supply of labor. 
C) The labor market is a single market for all different types of workers. 
D) The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor. 
A) Workers determine the supply of labor,and firms determine the demand for labor. 
B) Workers determine the demand for labor,and firms determine the supply of labor. 
C) The labor market is a single market for all different types of workers. 
D) The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor.

Question 14

Figure 6-3
 
-Refer to Figure 6-3.In panel (b),there will be

Accepted Answer

A) a shortage. 
B) equilibrium in the market. 
C) a surplus. 
D) lines of people waiting to buy the good. 
A) a shortage. 
B) equilibrium in the market. 
C) a surplus. 
D) lines of people waiting to buy the good.

Question 15

Suppose the government wants to encourage Americans to exercise more,so it imposes a binding price ceiling on the market for in-home treadmills.As a result,

Accepted Answer

A) the demand for treadmills will increase. 
B) the supply of treadmills will decrease. 
C) a shortage of treadmills will develop. 
D) All of the above are correct. 
A) the demand for treadmills will increase. 
B) the supply of treadmills will decrease. 
C) a shortage of treadmills will develop. 
D) All of the above are correct.

Question 16

Figure 6-16  
-Refer to Figure 6-16.In this market,a minimum wage of $7.25 creates a labor

Accepted Answer

A) shortage of 2,250 workers. 
B) shortage of 4,500 workers. 
C) surplus of 2,250 workers. 
D) surplus of 4,500 workers. 
A) shortage of 2,250 workers. 
B) shortage of 4,500 workers. 
C) surplus of 2,250 workers. 
D) surplus of 4,500 workers.

Question 17

Figure 6-5  
-Refer to Figure 6-5.If government imposes a price floor at $9,then the price floor causes

Accepted Answer

A) quantity demanded to decrease by 40 units. 
B) quantity supplied to increase by 20 units. 
C) a surplus of 60 units. 
D) All of the above are correct. 
A) quantity demanded to decrease by 40 units. 
B) quantity supplied to increase by 20 units. 
C) a surplus of 60 units. 
D) All of the above are correct.

Question 18

Figure 6-13
This figure shows the market demand and market supply curves for good X.  
-Refer to Figure 6-13.Which of the following statements is correct?

Accepted Answer

A) A price ceiling set at $6 would be binding,but a price ceiling set at $4 would not be binding. 
B) A price floor set at $4 would be binding,but a price ceiling set at $4 would not be binding. 
C) A price ceiling set at $3.50 would result in a surplus. 
D) A price floor set at $6.50 would result in a surplus. 
A) A price ceiling set at $6 would be binding,but a price ceiling set at $4 would not be binding. 
B) A price floor set at $4 would be binding,but a price ceiling set at $4 would not be binding. 
C) A price ceiling set at $3.50 would result in a surplus. 
D) A price floor set at $6.50 would result in a surplus.

Question 19

As a rationing mechanism,discrimination according to seller bias is

Accepted Answer

A) efficient and fair. 
B) efficient,but potentially unfair. 
C) inefficient,but fair. 
D) inefficient and potentially unfair. 
A) efficient and fair. 
B) efficient,but potentially unfair. 
C) inefficient,but fair. 
D) inefficient and potentially unfair.

Question 20

Suppose the equilibrium price of a tube of toothpaste is $2,and the government imposes a price floor of $3 per tube.As a result of the price floor,

Accepted Answer

A) quantity demanded decreases. 
B) quantity supplied increases. 
C) there is a surplus. 
D) All of the above are correct. 
A) quantity demanded decreases. 
B) quantity supplied increases. 
C) there is a surplus. 
D) All of the above are correct.

Exam 6: Supply Demand and Government Policies: Controls on Prices

If a price ceiling is a binding constraint on a market,then

When a binding price floor is imposed on a market,

A price ceiling is

If a binding price floor is imposed on the video game market,then

Economists generally believe that rent control is

​Figure 6-32 -Refer to Figure 6-32.Which of following statements is true based upon the conditions in the market?

Consider the market for gasoline.Buyers

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Figure 6-3 -Refer to Figure 6-3.A nonbinding price floor is shown in

Figure 6-6 -Refer to Figure 6-6.If the government imposes a price floor of $10 on this market,then there will be

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13.Which of the following price floors would be binding in this market?

Figure 6-9 -Refer to Figure 6-9.A price ceiling set at

Which of the following is correct?

Figure 6-3 -Refer to Figure 6-3.In panel (b),there will be

Suppose the government wants to encourage Americans to exercise more,so it imposes a binding price ceiling on the market for in-home treadmills.As a result,

Figure 6-16 -Refer to Figure 6-16.In this market,a minimum wage of $7.25 creates a labor

Figure 6-5 -Refer to Figure 6-5.If government imposes a price floor at $9,then the price floor causes

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13.Which of the following statements is correct?

As a rationing mechanism,discrimination according to seller bias is

Suppose the equilibrium price of a tube of toothpaste is $2,and the government imposes a price floor of $3 per tube.As a result of the price floor,

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A

Figure 6-32 -Refer to Figure 6-32.Which of following statements is true based upon the conditions in the market?